Harrisburg Plans First General-Obligation Payment Since ’11Romy Varghese
Harrisburg is set to make its first general-obligation bond payments since 2011, about two weeks after Pennsylvania’s capital exited state receivership.
The municipality will wire $4.67 million today toward debt payments totaling $5.14 million, and bond insurer Ambac Assurance Corp. will cover the rest, said Steven Goldfield, a state-appointed consultant for the community. The funds for the zero-coupon capital-appreciation bonds for the Series D and Series F of 1997 are due March 15, offering documents show.
Ambac, a unit of New York-based Ambac Financial Group Inc., has paid holders of the general-obligation securities as the city grappled with a fiscal crisis stemming from an overhaul and expansion of an incinerator that didn’t generate enough revenue to cover its liabilities.
In December, the municipality of 50,000 people cleared its debt burden through the sale and lease of assets such as its parking system, and after concessions from creditors. Harrisburg won an end to court oversight of its receivership effective March 1.
The city returned to the debt market for the first time since 2010 with $2 million in tax-anticipation notes in a deal that closed March 10, according to Goldfield.
“Ambac worked with Harrisburg and came to a mutually acceptable agreement that provides Harrisburg some needed liquidity relief now and for Ambac to recover claims later,” Abbe Goldstein, a spokeswoman for the company, said in an e-mail.